Working paper within the Information System Science’s project, ISV-WP-7.

CRITICAL SUCCESS FACTORS

A SURVEY

Niclas Eberhagen

Mansour Naseroladl

Department of Mathematics, Statistics and Computer Science

Växjö University

Sweden

May 1992

Abstract

Any manager within an organization has specific information needs due to his position,

responsibilities, functions and goals, both those on which his performance is measured and

those he has secretly stated to himself. The problem is how to define the information needs

as to satisfy the manager in his goal attainment. In this report we have presented a survey of

the critical success factors method that can help managers in defining their information

needs. The aim of our study has been to put the focus on a method that takes into

consideration the many types of information and goals, both the individual as well as the

organizational, and that may function as an information analysis tool in an IS-planning

process.

Keywords: Critical Success Factors, Managerial information needs, Information system,

Strategic IS-planning process.

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Content

1. Introduction ........................................................................................................................ 2

1.1 Background ...................................................................................................................... 2

1.2 Definitions of terms .......................................................................................................... 3

2. Purpose and aims of the report ........................................................................................... 4

3. Method ............................................................................................................................... 4

4. Comparable approaches to the CSF method ...................................................................... 5

4.1 By-product technique ....................................................................................................... 5

4.2 Null approach ................................................................................................................... 5

4.3 Key indicator system ........................................................................................................ 5

4.4 Total study process ........................................................................................................... 5

4.5 Comments on the methods ............................................................................................... 6

5. The CSF method ................................................................................................................. 7

5.1 Definition of the CSF ....................................................................................................... 7

5.2 Varying CSFs depending on manager .............................................................................. 7

5.3 Five sources of CSFs ........................................................................................................ 8

5.4 Different classifications of CSFs ...................................................................................... 9

5.5 Hierarchical nature of CSFs ............................................................................................. 9

6. The case of Asea Brown Boveri ....................................................................................... 11

7. The interview process ....................................................................................................... 14

7.1 The interview .................................................................................................................. 14

7.2 The analysis of the results .............................................................................................. 15

7.3 The results from Asea Brown Boveri ............................................................................. 16

8. The CSF method in the IS-Planning ................................................................................. 17

8.1 The IS-Planning process ................................................................................................. 17

8.2 The Strategic IS-Planning............................................................................................... 18

8.3 Consistency and validity ................................................................................................ 20

9. Final discussion and comments ........................................................................................ 21

9.1 Critiques of the CSF method .......................................................................................... 21

9.2 The CSF method in information analysis ....................................................................... 21

9.3 The CSF method compared to the MBI method ............................................................ 22

9.4 Experiences made during our study ............................................................................... 23

10. References ...................................................................................................................... 24

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1. Introduction

We will in this report present a survey of the Critical Success Factors method, abbreviated as

the CSF method, which in an appropriate way addresses the managerial information needs

that is important to success. The following quotations illustrate the above stated.

"Faced with an increasingly complex world, managers today are deciding that they need

access to the information which is pertinent to their particular roles and responsibilities." (Bullen and Rockart, 1981, p.383)

"The first thing about information systems that strikes me is that one gets too much

information. The information explosion crosses and criss-crosses the managers’ desks with a

great deal of data. Much of this is only partly digested and much of it is irrelevant...." (Rockart, 1979, p.82)

"I think the problem with management information systems in the past in many companies

has been that they are overwhelming as far as the executive is concerned. He has to go

through realms of reports and try to determine for himself what are the most critical pieces of

information contained in the reports so that he can take the necessary action and correct any

problems that have arisen." (Rockart, 1979, p.82)

The essence of these three above quotations implies that there is a problem of addressing

managerial information needs specific to a manager. The fact that each manager has specific

information needs should be clear but the lack of a good method in order to help him

determine his needs is the most obvious fact.

1.1 Background

The requirement for defining appropriate managerial information needs in a clear and

meaningful way was first approached by D. Ronald Daniel in 1961 in the management

literature. Based on this concept Rockart (1979) outlined and developed a method that

focuses on the individual manager and his current information needs hard as well as soft.

Also taking into consideration that the needs vary from manager to manager and are time

dependent. Later Bullen and Rockart (1981) took this method a step further by introducing a

broadened definition of the method to be used as a MIS planning tool. They also provided a

structured way of conducting an application of the method.

One reason for writing this report is that we found in our studies the usefulness and the

applicability of this method answer a lot of questions when it comes to determining what is

important information to the manager.

Another reason for delving into this kind of study is that it is a continuation of our previous

studies and therefore is of profit to us when it comes to deepening our knowledge in the field

of information systems.

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1.2 Definitions of terms

Before we delve into the realms of management and organization it is suitable to define the

terms closely linked with the management of organizations:

Critical success factors - are those few variables that affect a manager in achieving his goals

for his current or future areas of activity. The method helps defining those variables and the

information needed for every variable. Thus the manager gains a better understanding of his

situation. For every goal a manager has there may be many CSFs affecting them.

Strategy - "Strategy is the pattern of missions, objectives, policies, and significant resource

utilization plans stated in such a way as to define what business the company is in and the

kind of company it is or it is to be. A complete statement of strategy will define the product

line, the markets and market segments for which products are to be designed, the channels

through which these markets will be reached, the means by which the operation is to be

financed, the profit objectives, the size of the organization, and the "image" to which it will

project to employees, suppliers and customers."

Objectives - "Objectives are general statements about the directions in which a firm intends

to go, without stating specific targets to be reached at particular points in time."

Goals - "Goals are specific targets which are intended to be reached at a given point in time.

A goal is thus an operational transformation of one or more objectives."

Measures - "Measures are specific standards which allow the calibration of performance for

each critical success factor, goals or objectives. Measures can be either "soft" - that is,

subjective and qualitative- or "hard"-that is, objective and quantitative."

The above definitions are the same as used by Rockart and Bullen (1981, pp.385). However

they are necessary to establish in order to conduct a meaningful discussion of the method.

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2. Purpose and aims of the report

In this report we want to expose the CSF method and to state what this method is and what

can be achieved with it. This is to be done in the following four aspects:

- Give a synopsis on other methods and techniques as an attempt to show other concepts of

extracting managerial information needs, before we state what the CSF method is by

giving a definition of it. This will be done in chapters 4 and 5.

- Try to apply the method in a case study, thus trying to exemplify what a CSF is and how

to go about when applying the method. This will be done through chapters 6 and 7.

- Showing the CSF methods usage as a tool or technique in an IS-planning process, i.e.

showing the method as a strategic information system analysis tool. This will be done

through a study of the IS-planning process and the strategic IS-planning process in

chapter 8.

- In chapter 9 we discuss some critiques of the CSF method and make a comparative study

between the CSF method and the MBI method.

3. Method

The study we have conducted has taken the form of a literature study. We have used Libris

and Helecon, two databases consisting of reports and books in the faculty of economics. We

have looked at references in the latest articles on the topic in order to get the most relevant

references, i.e. we have performed a reversed chronological hierarchical tree structure search.

We have analyzed a study of one of the divisions at Asea Brown Boveri in Ludvika. The

study was based on interviews, made by two students, Dalhman and Naseroladl (1990), with

five managers at that division. The interview at that time was focused on the division’s

environmental scanning process. However careful analysis elicited what is relevant in the

present study. The analysis is done in order to study the individual managerial information

needs and to study their individual CSFs but also to show us what a CSF is.

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4. Comparable approaches to the CSF method

We will present four ways of dealing with managerial information needs; the By-product

technique, the Null approach, the Key Indicator system and the Total study process. All of

these are mentioned by Rockart (1979) in his first study where he gives a brief synopsis on

each of them. Some comments on these approaches are presented in section 4.5.

4.1 By-product technique

In this approach little attention is paid to the real information needs of the manager. The

firm's computer based information system is focused on handling routine paperwork

processing, i.e. payrolls, sales-budgets, etc. All reports reaching the manager or management

are often by-products of the existing system. The reports going up are often what lower levels

feels useful and should be brought to the manager’s attention. Sometimes this distribution of

reports could very well be based on a long ago forgotten one time request made by the

manager for some specific event. The request has then in the lower levels been made an

ongoing periodic process.

This method has been the most predominant in recent years and leads to a welter of reports

landing on the manager’s desk. There have been no means for the manager to actually specify

what he really needs.

4.2 Null approach

Followers of this approach state that managerial activities are dynamic and ever changing so

one cannot predetermine what the information needs will be at any point of time during any

activity. The managers rely on future-orientated informal information of subjective nature,

often quickly assembled, which is spread by word of mouth from advisers. The computer

based reports, no matter how well developed, are considered not useful because of the

inadequacy of the information systems. Heavy reliance of oral communication and soft

information is advocated through this approach.

4.3 Key indicator system

In a key indicator system the technique is based on three concepts. Firstly, to define a set of

keys that defines or indicates the health of the business. Information is gathered about each

key indicator. In the second concept thought is put into exception reporting of functions that

differentiate from expected results, i.e. give the manager the ability to follow up those reports

that indicate a significant exception of performance in some function in contrast to

predefined key values. The third concept involves display of these reports in the context of

the expanding availability of better, cheaper and more flexible visual display techniques.

4.4 Total study process

Managers in different levels and different functions are asked to define their information

needs, and the results of the interviews are later compared with the existing information

system. The objective of this method is to establish a comprehension of the overall business

and the information needs linked with the business. An understanding of the existing

information systems is established and the gaps between them and the requested information

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system are tracked down. A plan for binding together the current systems with new necessary

ones is implemented. This is a top-down method where results of the study either can be

biased towards the top management activities needs or toward the paperwork processing

depending on the team of analysts. A current popular implementation of this method is IBM's

Business System Planning method which is aimed to a top-down analysis of the

organization's information needs.

4.5 Comments on the methods

The by-product technique is an inexpensive way of giving the manager information that

satisfies his role of controlling the management activities. However the information given is

in such a form that it leads to heaps of reports that only contain small portions of what is

actually necessary to him for the current activity. The method takes no consideration to the

soft informal information need that in effect accounts for a high basis of all decision making

of a manager.

The null-approach does take this into consideration and is really the most inexpensive

solution by calling all information systems for useless and advocate the role of soft, informal,

oral information. The major fault of this approach is that it misses out the need for defining

the hard computer based information used for controlling the business.

The key indicator system gives the manager a significantly useful amount of information

which is objective, quantifiable and computer-based. The disadvantage of this method is that

the manager obtains too many financial and statistical variables of non-subjective nature.

This kind of presentation makes the information relatively complicated for the manager to

analyze. In this method the focus tends to lean towards computer based information alone.

The last way of dealing with managerial information needs is an easily understood one.

Getting a solid understanding of the overall needs of the business is a good starting point. It

leads to simplified means of getting hold of what information system requirements will be

needed or added to the existing information system in order to make it as complete as

possible. However this method speaks of heavy use of man-power and high costs in

procedural conducting. Another problem is the huge amount of data collected and the

difficulty in devising reports that satisfy individual managers. It is indeed a total study but in

the aspect of cost-benefit it may not be a preferred one.

The above discussed aspects of dealing with managerial information needs suffer all from a

couple of drawbacks. They are either highly costing in manpower and cash, as in the total

study, or giving too much information, as such is the case of the by-product method, thus

giving a lot of irrelevant information. The information given is often of statistical nature and

not paying any attention to the fact that needs vary from time to time. It is not always clear

that the individual managerial information needs are satisfied.

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5. The CSF method

There exists a method, named the CSF method, which answers to a lot of those drawbacks

stated in the previous chapter:

"The CSF method focuses on individual managers information needs and on each manager's

current information needs both hard and soft. It provides for identifying managerial

information needs in a clear and meaningful way." (Rockart, 1979, p.85)

5.1 Definition of the CSF

The Critical Success Factor is a method that answers the question of what information is

needed.

Many managers spend most of their time and energy, at work or leisure, thinking about those

few areas of activity which are of their concern. Mostly thinking about how the performance

could be improved and what is affecting the performance.

Critical success factors are those few variables that affect a manager in achieving his goals

for his current or future areas of activity. Having these variables brought forth facilitates a lot

of the manager’s work. These key variables can be used in the company's planning process,

in helping to improve communication among the managers or as an aid in the information

system planning.

The CSF method is applied in the form of interviews usually conducted in two or three

separate sessions. Initially the goals of the manager are discussed and recorded and the CSFs

that affect these goals are brought forth. In the second session the information needed about

these CSFs and a set of measures, of how and where to obtain the information, are

established. The measures are treated as directions where to go in the planning process of the

information system, i.e. where and how information should be collected and treated. We will

return to the interview process later, in chapter 6.

It is important to a manager to determine his goals but equally important to determine those

variables that will affect the achievement of his goals, failure or success. These critical key

variables, made explicit, should receive constant attention from the manager, i.e. have their

current status continually measured.

5.2 Varying CSFs depending on manager

CSFs are related to a specific individual in his specific situation. These must be tailored to

the industry and company. These will vary, manager to manager, depending on position

within the hierarchy of the organization. The CSFs will change when the environment of the

industry changes, the position of the company within the industry changes and when new

problems arises before the manager.

CSFs do not have a standard set of measures, like key indicators, which can be applied to

everything within the organization. These are not factors which solely take into consideration

historical, aggregated or accounted information. CSFs are those specific variables of main

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importance to a specific manager at a specific point of time. These demand specific

situational measures.

5.3 Five sources of CSFs

CSFs have been found to arise from five different sources:

- Industrial

The industry in itself hosts a set of CSFs which are defined by the characteristics of the

industry. Each company within the industry must take these into consideration.

- Competitive and positional

Each company is in an individual situation within the industry depending on its history,

geographical situation and competitive strategy. These dependencies will surely dictate some

of the CSFs.

- Environmental

From environmental sources emanates those factors from areas which a company has little or

no control of, such as fluctuations of the economy or national politics. There could well be,

for some companies, factors like different trends and energy sources.

- Temporal

CSFs arising from temporal sources are factors that become critical for a period of time and

then decline in importance, e.g. breakdown of a firm's major computer system.

- Managerial

Depending on the manager's functional situation different CSFs will be generated, e.g. a

manager concerned with economics will certainly not be concerned with those of a

production manager.

These sources were discovered by Rockart (1979) in his early studies and have been

acknowledged in a later study made by Rockart and Bullen (1981).

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5.4 Different classifications of CSFs

CSFs can be classified in three dimensions; internal CSFs versus external CSFs, monitoring

CSFs versus building/adaptive CSFs and the above mentioned five sources. These ways of

classifying the CSFs are useful for an analyst in that they form a pattern that shows what the

manager's world view looks like.

The first classification, internal versus external, meaning that internal CSFs are related to the

manager's department or the staff of people he controls, i.e. CSFs related to issues and

situation within the managers control. External CSFs are those which most often are beyond

the managerial influence such as the price of raw material.

The second classification, monitoring versus building/adaptive, meaning how the manager is

related to his function. If he is concerned a lot with the performance of his department and

puts a great amount of effort in guiding and measuring that performance the manager is

monitoring and thus have CSFs related to monitoring. On the other hand, a manager who is

much concerned about future planning and changes is then building/adapting, thus being

concerned with CSFs related to building/adapting.

A manager is a mix of both but often tends towards one or the other. The classification can

help to visualize what kind of CSFs a manager is concerned with.

5.5 Hierarchical nature of CSFs

From an individual manager's perspective he has his own CSFs that must be paid attention

to. From the company's perspective four hierarchical levels of CSFs can be discerned:

industrial, corporative, sub-organizational and individual.

Industrial CSFs affects every organization within an industry in its development of strategies,

objectives and goals. Strategies, objectives and goals developed by a company leads to a

specific set of corporate CSFs. Every corporation's set of CSFs are unique to its own

circumstances.

Corporative CSFs then becomes the input to a determination process for each sub-

organization within the corporate. Analysis of corporative strategies, objectives, goals and

CSFs including environmental and temporal factors leads to a new set of CSFs for each sub-

organization.

The process can continue as deep as there are levels within the hierarchy. All sub-

organizations are affected in their development of strategies, objectives and goals by the

temporal and the environmental CSFs as well as those from higher levels. Every manager at

every level in the organization has specific CSFs that are determined by the role of the

manager and the temporal factors. The above discussed is summarized in figure 1 below.

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Sub-organizational

· Strategy

· Objectives

· Goals

Sub-organizational

CSFs

Individual manager

· Goals

· Indiv idual CSFs

Corporate

· Strategy

· Objectives

· Goals

Corporate CSFs

Environmental

factors

Environmental

factors

Environmental

factors

Temporal

factors

Temporal

factors

Temporal

factors

Industry

CSFs

Sub-Industry

CSFs

or

Functional

CSFs

Role

CSFs

Figure 1. From "A Primer on Critical Success Factors" by C.V. Bullen and J.F. Rockart, 1981, Sloan School of

Management, June.

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6. The case of Asea Brown Boveri

To exemplify what CSFs might be and how they can be derived we have looked at a division

of Asea Brown Boveri (ABB) in Ludvika, HV/SWITCHGEAR AB. Our study is based on a

series of interviews with the top managers made by Dalhman and Naseroladl (1990). Their

aim was to establish an understanding of the information flows, of both external and internal

types, of the company. They were also interested in the company's environmental scanning

process. Their results form the basis of our study in this chapter.

The interviews were made with the following managers:

- Division CEO

- Sales and marketing manager

- Construction manager

- Economy manager

- Production manager

The strategic goal of the division was to give technical support and services to their clients

but also to develop, construct, produce and market switchgears, within the electrical power

industry.

Through the interviews the divisional information needs showed to be as follows:

Object of information need

Clients

Competitors

Suppliers

Countries

ABB Corporation

Other divisions (ABB)

Information needed

Long-range strategies

Policies

Order specifications

Solvency

Technological level

Price levels

Advisory service

Price levels

Quality

Trade policies

Energy policies

Inflation

Laws and legislation

Customs

Recommendations within ABB

"Guidelines" when doing business

Coordination of information and reports

The division’s information needs were mainly satisfied through the following sources:

- Magazines and other literature covering the technical sectors

- Publications from competitors

- By asking their clients and competitors

- International conferences

- Ministry of foreign affairs

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- Computer department within the corporation

- Information databases

- Lawyers

During the interviews the managers were asked to state their objectives or goals and they put

them in terms of area of activity. They were also asked about their individual information

needs during their daily activities. From the managers' goals or area of activity and their

individual information needs we boldly swung the sword of analysis in order to get an idea

what the individual managers' CSFs might be. We arrived with the following lists of their

CSFs which we present below manager by manager together with their goals or area of

activity.

Division CEO

Managing and monitoring of the divisional activities

Giving system support

Giving technical support

Sales and marketing manager

Order processing

Marketing of products

Selling of product

Marketing research

Construction Manager

Mechanical and electrical construction

Evaluation of products

Development of material and processes

Order processing of nonstandard products

Economy manager

Liability of the products

Running divisional economy

Handle internal and external divisional reports

Profitability improvement

Coordination of computer issues

Production manager

Order processing

Assembly of switchgears

Divisional production

Meeting environmental standards

CSFs

Client strategies and policies

Trade policies

Energy policies

Infrastructure

Currency

Environmental policies

Competition

Meeting trade policies

Meeting conventional standards

Development of the market

Price levels

Meeting recommendation within ABB

Client solvency

Meeting technical standards

Access to technical and material information

Client order specification

Access to product information

Technological legislation

Meeting profit demands

Currency

Trade policies

Recommendations within ABB for business activities

Allocation of the production resources

Meeting technical competition

Following up technical innovations

Infrastructure of client

Client strategies

From these individual managerial CSFs we want to establish a picture of the organizations

CSFs and thereby see what affects the organization's goal attainment. But how to go about?

13

Bullen and Rockart (1981) states that by aggregating the top managerial CSFs an analyst can

obtain a picture of the organizational CSFs. This can be done by pointing out those CSFs that

are defined by more than one manager, i.e. through the intersection of the managerial CSFs,

the analyst can then derive the organizational CSFs. Bullen and Rockart (1981) supports

these thoughts by stating that through studies it has proven to be, even though the managers

are at different levels and have different functions and responsibilities, a recommendable way

of going about.

We have done this and have come up with a list showing the organizational CSFs of the

division.

Organizational CSFs

- Energy and environmental policies

- Trade policies

- Client strategies

- Meeting technical standards

- Currency

- Infrastructure

- Technical innovation

The purpose of this study was to give some examples of different individual managerial

CSFs, depending on function and role, in an organization, as in this case within the electrical

power industry.

We also wanted to show how an analyst might go about in order to derive the organizational

CSFs and what these might look like.

However, these results must be regarded as purely hypothetical due to the fact that we have

not been able to perform a real study within the division and we have not been able to have

our results validated or verified. To do so requires interviews with the managers where the

analyst works along-side the managers who take an active part in the analysis. The interview

process will be discussed in the next chapter.

For the ones interested in taking part of other types of CSFs, from other case studies, we

recommend reading Rockart (1979) and Bullen and Rockart (1981).

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7. The interview process

"The CSF interview process is designed to have each manager explicitly state those factors

which are critical, both for himself and the corporation. By voicing these CSFs managers are

able to sharpen their understanding of the business's priority areas. The ways in which the

CSFs might be measured are also discussed, which lead to considering what information is

necessary." (Rockart and Crescenzi, 1984, p.7)

As stated earlier the CSF study is performed as an interview conducted in two or three

sessions. First the managerial goals and CSFs are discussed, thus establishing the managerial

information needs. Then measures of each CSF and the information needs that each measure

induces are defined giving us a plan or model showing us the managerial information

requirements.

Bullen and Rockart (1981) have detailed the interview procedure and techniques for the

interviewer, in helping the interviewees in thinking about and identifying their CSFs.

7.1 The interview

The first session is the preliminary interview with the manager. The analyst must pay

attention to all of the goals of the manager both the formal, which are those the manager is

measured on, and the informal ones, most often the vital ones to him and his function. The

discussion is meant to lead in the direction of eliciting the CSFs which affect his goals and

the information needed about these CSFs. Helping the manager to a better understanding of

his information needs is one objective of the method. This could very well be the first time

the manager sees his information needs in a structured way.

The analyst must go to length in order to extract all of the CSFs possible. In assisting him,

and helping the manager to concentrate on his CSFs the following questions could be posed:

"In what one, two or three areas would failure to perform well hurt you the most? In short

where would you most hate to see something go wrong?" (Bullen and Rockart, 1981, p.419)

"Assume you are placed in a dark room with no access to the outside world, except for the

food and water, today. What would you most want to know about the business when you

came out two weeks later?" (Bullen and Rockart, 1981, p.419)

The analyst could also compare the CSFs with the sources from section 5.3 and the

classifications from section 5.4 in order to find out if the manager is only looking at one type

of CSFs depending on what is currently occupying his mind. The manager could also be

talking about the same CSF but from different perspectives which the analyst must consider.

The manager ranks the CSFs and makes a list of them showing the most important one at the

top. Rockart (1979) recommends a number of seven as a maximum.

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7.2 The analysis of the results

After the first interview session the results obtained should be analyzed by the interviewer in

order to get a clear understanding about the company's position and situation. The results

should be reviewed:

- in order to check whether the managers have covered all of the major areas of his

function;

- in order to obtain a common pattern of CSFs due to common managerial perception of

problems, opportunities, industry structure and etc, by comparing the interviewees

against each other.

The analyst may have to go back to the managers for clarification or sharpening up the

results.

To obtain a picture of the organizational CSFs the analyst could aggregate several of the

individual managerial CSFs as shown in figure 2.

Manager 1

Determine

Individual

CSFs

Manager 2

Determine

Individual

CSFs

Manager n

Determine

Individual

CSFs

Organizational

CSFs

Figure 2. Process of aggregating individual managerial CSFs in order to get the organizational CSFs.

This is a bottom-up process giving the analyst a mean to discover exactly which information

databases are most necessary to support the managers due to the fact that common CSFs and

measures may induce the same information needs.

Having now gained a plan or model showing us the information structure within the

organization, consisting of both common and individual information needs, we will, if this

model is accepted by the management, continue onto further analysis of the information

requirements.

Now we go on to the second session with all of the managers. Here measures for each of the

CSFs are discussed and the information needed for all of the measures, both hard and soft, is

defined. Thus we obtain a plan or model showing us a set of information requirements that

could have strategic value to the organization. This will show and help in deciding what

products and services an information system might provide us with. However this is beyond

the scope of our discussion here.

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7.3 The results from Asea Brown Boveri

In the interview process described in section 7.1 the managers take an active part during the

process. Thus results can be verified or restated. The same people who do the interview with

the managers are the same that will analyze the results and are therefore in the position to

return quickly to the manager for supplementary details. Due to the circumstances of our

study of the division at Asea Brown Boveri we could not go back and check the results with

the managers and sharpen them up.

We derived from the managers stated goals, of their functions, and their information needs

the CSFs which would affect their activities the most. We compared the results from the

interviews in order to look for common perceptions of problems and opportunities, but also

in order to get a picture of the organizational CSFs according to figure 2.

The aggregation of the individual manager's CSFs gave us the following organizational CSF

picture, which is presented in chapter 6:

- Energy and environmental policies

- Trade policies

- Client strategies

- Meeting technical standards

- Currency

- Infrastructure

- Technical innovation

The common managerial CSFs presented give us a picture of company's position and

situation. Therefore it gives us the possibility to perceive those factors which are of strategic

value to the organization.

From the aggregated CSF picture one can derive the organizationally induced information

needs. Thus it may provide us with the means to discover which potential information

databases that might be necessary in order to support the organization in its activities. The

organizational CSFs picture gives us the basis on which the information architecture may rest

upon.

With this information analysis done we could go on to find the measures of the CSFs, but

that requires the participation of the managers, thus our study ends here. The case study is

intended to show the preliminary information analysis and beyond this point we would

proceed further with the information system planning.

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8. The CSF method in the IS-Planning

In the previous chapters we have spoken of what a CSF is and shown examples of CSFs

through a case study and briefly explored the process of determining these CSFs through the

interview process. In this chapter we will attempt to make some use of the CSF concept.

Bullen and Rockart (1981) have mentioned three usages of the CSF:

- As a method in helping the manager determining the wanted information. That is through

a study of the managerial goals and the CSFs affecting these goals determining measures

of his CSFs. Then establishing the information needs these measures induce and then

determining the reports that will satisfy these needs. From the reports key information

databases are established. However building an information system just for one manager,

even if he may be the top executive, is too expensive for most companies, as Bullen and

Rockart (1981) pointed out.

- as an aid in the company's long-range strategic planning and allocation of resources. This

usage we do not intend to discuss any further in this report.

- Last as an aid in the company’s IS-planning process. This third usage is also the most

widely spread. This is the usage we wish to explore by putting the CSF method into the

IS-planning process as an information requirements analysis tool.

8.1 The IS-Planning process

Bullen and Rockart (1981) have detailed a procedure for the IS-planning process which

purpose is that of producing an MIS. However the model we will endorse is the one

developed by Bowman, et al. (1983), see figure 3. This model is also adopted by Henderson

and Sifonis (1988) which we will refer to later.

Strategic Business

Planning

Strategic IS-Planning

or

Info. requirements

analysis

Resource allocation

or

IS investment plan

Figure 3. The three-stage planning model.

This model is a three stage model of the planning process. The first stage is the strategic

business planning whose main objective is to establish or create strategic goals that align to

the organization's strategic goals and a set of assumptions about the environment underlying

these goals. More can be achieved through the business planning but in our discussion it is

satisfactory for us just to assume the above products because that is what we will take into

consideration later in our discussion.

The second stage is the information requirement analysis or the strategic IS-planning stage.

The purpose of this stage is to make use of the above mentioned goals in order to obtain

organizational information requirements. These requirements are required organizational

wide for identifying possible markets for applications and other support systems. It is in this

stage we will meet the CSF method which both Davis and Olson (1985) and Henderson and

18

Sifonis (1988) make use of as an analysis tool of the information requirements. This we will

discuss further in section 8.2.

The third stage uses as input the product of the information requirements analysis. Here the

resources are allocated. Which applications should be implemented and in what order are

also determined, i.e. determining which ones will have the most strategic impact on the

organization. The IS resources are limited and not everything can be done at once. The issue

may have to be reduced to a question of cost-benefit.

8.2 The Strategic IS-Planning

The strategic IS-planning is based on the business planning process and the strategic goals

which are derived from that process. In the business planning stage, there is a vision which

gives the futuristic picture of the organization and then a more general process of planning

which is called business planning process, see figure 4. These two processes form the

organization's strategic goals. The development of the strategic goals makes the usage of the

CSF method possible.

VISION Strategy

Competitive

Social/ Political

Strategic

Goals CSF

CDS

IS

Products

and

Servic es

S

D

M

VBP

CAS

External

Strategic

Models

Strategic

Busine ss Planning

Strategic

IS Planning

IS

Investment

Plan

Figure 4. From "The Value of Strategic IS Planning: Understanding Consistency, Validity, and IS Markets " by J.C.

Henderson and J.G. Sifonis, 1988, MIS Quarterly, June.

Four products are derived from the CSF study and are called the primary products of the

strategic IS-planning. These products are the following:

- Critical decision sets (CDS)

- Critical assumption sets (CAS)

- Value-based processes (VBP)

- Strategic data models (SDM)

The function of these sets is to reflect different perspectives of information requirements.

The primary products together with the CSFs are used to define markets for the IS-products

and IS-services which may have strategic value to the organization and to justify the

investments necessary in order to implement the IS-products and IS-services. A more

detailed definition of these sets follows below.

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- Critical decision sets

Critical decision sets are those decisions that influence one or more CSFs. For example if

purchasing a car is a CSF, then the decision of which model and to what price, influences the

purchase and therefore is a critical decision. CDSs are used to define possible DSS markets

within the organization, see figure 5.

Strategic goals

CSFs

Value-based

proc esses

Critica l

Dec ision Set

Critica l

Assumption Set

EIS MIS DSS

Figure 5. Potential IS-services or IS-markets defined by the primary planning products.

- Critical assumption sets

Those beliefs that underlie the CSFs are called critical assumption. They are beliefs about the

environment as the managers conceive it, external or internal. CAS is used in defining

markets for EIS. Critical assumption sets are also used to assess the validity of the strategic

IS-plan as they are linked to the ones derived from the business planning process. More about

this in section 8.3.

- Value-based processes

The business processes which are tightly linked to a CSF are called value-based processes

and provide two major contributions:

1. Provides a monitoring and controlling perspective to the potential set of IS market.

2. Providing a direct link to the existing application base.

The VBPs are use to define possible domains for MIS. These give a good base for the IS-

planners to distinguish the existing IS-assets and those which are developed to support

functions or processes.

- Strategic data models

The strategic data models show the significant classes of strategic data and the existing

relations between them. The usage of the strategic data models are in two areas:

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1. Coordination of investment for management support system, like MIS, DSS and EIS.

2. Where to put the focus in order to manage more effectively the data resources.

The strategic IS-planning process does not produce an information system. The planning

products do not define systems which can be directly implemented. There is still the question

of what we should invest in, i.e. where to put our money and on what. This is what the

strategic IS-planning process is about, defining markets for possible information system

services of strategic value.

The strategic IS-planning process does not produce a detailed model showing all the data

necessary but rather shows an information architecture of what we would need and how it

can be assessed.

8.3 Consistency and validity

There are two matters that should be identified in the IS-planning process, internal

consistency and external validity. King (1983) discussed validity and consistency as two

critical components of any systematic evaluation of a strategic planning process.

- Internal consistency

It is very important in an IS-planning process that there is a good interpretation between

different levels of the organization. What is conceived of in one level should be correctly

operationalized in lower ones.

A planner can use the CSFs and assumptions to identify possible inconsistencies and to focus

attention on resolving them. The strategic IS-planning draws forth both CSFs and

assumptions. With these the internal consistency of the plan can be directly assessed together

with the results achieved about behaviors and beliefs in the business planning. A good way

of omitting the problem of internal inconsistency is using large group sessions to try to

validate and consolidate both the CSFs and the assumptions.

- External validity

This refers to the appropriateness of the resulting planning. A risk in the IS-planning process

is to omit or incorrectly address relevant factors, i.e. giving good solutions to the wrong

problems. An external valid planning process is the one which does not suffer from the

collective bias of those concerned with the planning process. A technique which can be

useable in order to decrease the risk of bias, and thus ensure a more valid plan, is a dialectic

planning process.

The Strategic Business Planning process and the Strategic IS-Planning process are closely

linked together not only by the strategic goals, see figure 4, but also by the assumptions

derived from both processes. In the business planning process external models are built of

how the environment is conceived. Similar in the IS-planning sets of critical assumptions are

drawn from the CSF study. The critical assumptions can be fed back to the business planning

process, see figure 4, in order to ensure the validity of the plan by matching them with the

results drawn there and look for inconsistencies.

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9. Final conclusions and comments

This study has been a literature study of the CSF method. Everything that has been said or

done has been from a theoretical and experimental stand point. However, we believe that the

aims set out to achieve we have succeeded with. Since we lack any real case experience it is

hard to evaluate the method and point out pros and cons when it comes to practical usage.

However we can look upon the qualities that others have found out through their studies.

9.1 Critiques of the CSF method

What we have found is that some cons have been raised against the CSF method.

First, as noted by Boynton and Zmud (1984), it has been asserted that the method is difficult

to use, demanding expertise. It is pointed out that for complex organizations whose analyst

does not have the necessary skills and thorough understanding of the organization it is not an

appropriate method to use. However by careful studies of the organization in all aspects and

by performing a sort of a bottom-up study, thus gaining more and more understanding of

organization, this could be overcome.

Another aspect is the threat of interviewer and manager bias introduced during the interview

session. However as Boynton and Zmud (1984) pointed out, referring to a study done by

Munro (1983), that two independent skillfully directed CSF analyses showed up with the

same results thus indicating no threat of analyst-manager bias.

We have also encountered some pros advocating the use of the CSF method.

Boynton and Zmud (1984) showed through their own experiences two key strengths of the

CSF method. First, the CSF method is well received by senior managers as they most often

think in terms of CSFs and should thus intuitively understand the thrust of the method.

Secondly, the nature of the CSF method facilitates a structured top-down analysis or planning

process within the organization.

9.2 The CSF method in information analysis

The CSF method helps in determining what the important information to the manager is.

What is then important information? The answer is that there are no generalized rules about

what the important information is to a manager.

We believe that any such attempt to specify in a generalized manner what should be

important is futile. Because what is important depends on what industry the manager is

within, what roles and responsibilities he has as well as goals, both formal and informal.

What is important information to a manager is that which he needs to know in order to

handle daily whereabouts of his function and in the pursuit of his goals. The information that

he really must get a grip on and which will severely affect him is equivalent to critical

information, which is something he cannot do without.

Do the usefulness and the applicability of this method answer the questions when it comes to

determining what the important information to the manager is? Yes, we believe it does

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because the method takes into account all of the factors mentioned above and as well as all of

the managerial goals. Since the method can help in determining one manager’s information

needs it can help defining that of the organization. Thus the method can be used as an

analysis tool in an information system planning process. This is something that we have

hopefully shown through this report.

In our study of the interview analysis of the division at Asea Brown Boveri we were

interested in the information the managers considered to be important. The success of the

manager's goal attainment is dependent on whether he takes into consideration his CSFs or

not and these induce an information need. Thus by analyzing the goals of the manager, that

directs his activities, and his information needs, which he states to be important, we can

derive the potential CSFs which affect him in his function. This preliminary analysis of the

individual managers' information needs is essential in the building of an organizational

information structure, mainly because it is the fundament of the future information system.

The results from our study are not complete as to the extent of using them as a product of an

information analysis tool. However they show us the direction one might take in the IS-

planning process.

9.3 The CSF method compared to the MBI method

Here we compare the CSF method with a system development method called MBI method

(goal, decision, information) (Apelkrans and Åbom 1998).

The MBI method focuses on the operational problems of the organization and elicits these

problems and examines them in order to provide a solution based on computer techniques.

In the MBI method a great deal of concentration is focused on the analyzing of the total

operation in order to get a good picture of present situation of the company. This will be

done as a beginning phase. After coming to conclusions in this phase one proceeds with the

interview phase with both the employees and the managers. They state what they meet as

problems in their daily activities. These problems are then classified and those which are

most critical are given priority.

The above procedure is different from the CSF where the analyst or the interviewer begins

the interview without any obvious knowledge of the prospective critical areas.

The analysis phase in the MBI method is the most relevant for the comparison between the

methods. In this phase the information study is performed in which one determines what kind

of information the system should contain. In the second stage, how the information will be

produced and processed. In the third stage, the modeling of the database takes place.

To perform the above stages in the MBI method requires different graphs where the attained

information is put together. Therefore it gives a good picture of the problem areas. In the

CSF method it seems that there is no obvious routine that shows how to handle the attained

information.

23

Some dissimilarities and similarities are as follows:

- In the MBI method one seeks to get to the problem area or when the problem area is

already known one begins from there. In the CSF method you do not talk about the

problem area but mostly about information needs addressed to the manager and if there is

any problem area that attention should be focused on it will be clarified later.

- There is dissimilarity between methods concerning the type of information they process.

In the MBI method the type of information is mostly internal. The focus is on the

employees and managers. However in the CSF method the types of information may be

both internal and external.

- The third dissimilarity is that MBI method is mostly concerned with hard information

whereas the CSF method takes into consideration both hard and soft information.

- One similarity between the methods is the interview technique. Both methods use the

interview technique to get to the point of interest.

- Another similarity is that both methods are searching for a critical area. In the MBI

method attempt is done to get an understanding about the problem area which is critical

to the company. In the CSF method, attempt is done to get an understanding of the

critical information needs.

9.4 Experiences made during our study

Some of the experiences we have made through our study of the CSF method are those

which concern the literature. To get an understanding of how to go by with the CSF method

and to get a mental picture of how it functions can be somewhat confusing depending on

which author you follow. What is confusing is the way different authors use different

contexts. As an example you may compare Rockart (1979) with Henderson and Sifonis

(1987). They have not the same understanding concerning what the information system is

and where the CSF method is placed in the information system planning process. Rockart

(1979) discusses the information system as something which is derived from the CSF method

and is built upon the conclusions of the method. Henderson and Sifonis (1987) discuss the

whole three stages shown in figure 3 as the information system. This could leave the reader

bewildered in what to believe of the information system.

The experiences, mentioned above, could mainly be due to the fact that as time has gone by

so has the usage of the CSF method been taken further into a broader aspect. The definition

of the information system has gone from something being an MIS to including a wider

organizational aspect of the information system, hosting also DSS and EIS.

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10. References

Apelkrans M and Åbom K (1988) Systemering I. Studentlitteratur, Lund.

Bowman B, Davis G B, and Wetherbe J C (1983) Three Stage Model of MIS Planning.

Information and Management, February.

Boynton A C and Zmud R W (1984) An Assessment of Critical Success Factors. Sloan

Management Review, Summer.

Bullen C V and Rockart J F (1981) A Primer on Critical Success Factors. Sloan School of

Management, June.

Dalhman G and Naseroladl M (1990) Omvärldsbevakning i ABB HV/Switchgear AB.

Informationssytemteori 10p, Institutionen för matematik, statistik och ADB, Högskolan i

Växjö.

Davis G B and Olson M H (1985) Management Information Systems. McGraw-Hill Book

Company, Singapore.

Henderson J C and Sifonis J G (1988) The Value of Strategic IS Planning: Understanding

Consistency, Validity and IS Markets. MIS Quarterly, June.

King W R (1983) Evaluating Strategic Planning Systems. Strategic mangement journal (4:3),

July-September.

Munro M C (1983) An Opinion ... Comment on Critical Succes Factors Work. MIS

Quarterly, September.

Rockart J F (1979) Chief executives define their own data needs. Harvard Business review,

Mars-April.

Rockart J F and Crescenzi A D (1984) Engaging Top Management in Information

Technology. Sloan Management Review, Summer.